AS investors profit from short-duration securities on Thursday, the average yield on Nigerian Treasury Bills and Federal Government (FGN) bonds increases. Trading data reveals that the fixed income market was under sell pressure, which increased the average yield despite a downturn.
As the equities market begins to recover from downturns, lower trading records keep the yield curve flat. In the meantime, despite limited inflows into the financial system, short-term rates in the money market decreased.
Cash is exposed to high inflation rates and fluctuating exchange rates while investing in fixed income market securities. The overnight lending rate decreased by 13 basis points to 14.0 percent on Thursday, according to data from the FMDQ Exchange platform.
The average interbank rate was hampered by the open buy back’s fall as well. Trading finished on a sour note in the secondary Treasury bill market as the average yield increased by 3 basis points to 4.7 percent.
According to a market report by Cordros Capital, profit-taking on the bills with maturities of 49 and 154 days increased the average yield in the short and mid parts of the curve by 6 basis points and 3 basis points, respectively.
However, a limited trading record caused the average yield on Treasury instruments to settle flat at the long end. According to dealers’ notes, the open market operations (OMO bills) segment’s average yield remained constant at 5.2 percent.
After the primary market auction earlier in the week, the secondary market selloff by bondholders had an impact on the FGN Bonds yield on Thursday. The average yield increased marginally by one basis point to 11.1 percent as trading activity in the sector ended mixed but with a bearish slant.
According to traders at Cordros Capital, the average yield throughout the benchmark curve finished flat at the short and long ends but increased at the midpoint (+2bps) due to investor selling off of the FEB-2028 (+6bps) bond.
